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Beverly Hills Patch Interview with TERRE STEINBECK!

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Economic update for the week ending October 10, 2015

Stocks close the week with big gains – Minutes from the Federal Reserve’s September meeting released this week made investors feel that the Fed’s first rate rise since 2006 will not happen this year. The notes revealed that The Fed is worried about unusually low inflation, spill over from slowing in China, and unusually low wage growth. They also said that the economy was still growing. The September jobs report showed job growth around 140,000 jobs a month for the last 2 months, after averaging 212,000 new jobs monthly for the first 7 months of the year. That slowdown also caused investors to expect that The Fed will not raise rates in the next couple of months as previously expected. Higher interest rates mean higher borrowing costs which cut into corporate profits, so continued low rates were seen as positive by investors. Oil prices also rose this week on fears of Russia’s involvement in Syria. Low oil prices have hurt the energy sector, so energy stocks rose on higher oil prices. The dollar which has been strong this year and has caused U.S. goods to be more expensive overseas and overseas goods to be less expensive here in the U.S. also weakened this week. This was helpful as exports have suffered as a result of the strong dollar and slowing economies overseas. The Dow Jones Industrial Average closed the week at 17,084.49, up from last week’s close of 16,472.37. The S&P 500 closed the week at 2,014.89, up from last Friday’s close of 1,951.36. The NASDAQ closed the week at 4,830.47, up from last week’s close of 4,707.78.

Treasury bonds rise from last week’s lows – The 10 year Treasury bond yield closed week at 2.12%, up from 1.99% last Friday. The 30 year treasury bond yield closed Friday at 2.94%, up from last week’s close of 2.82%. Bond yields follow stocks as money moves. Often when investors sell stocks on fears in the stock market they buy bonds which are safe but offer a low return. This week they bought stocks and sold bonds which drove bond yields higher.
Mortgage rates rise from last week’s lows of the year – The 30 year fixed rates are around 3..875% for loans up to $417,000, and around 4.00% for loans over $417,000. The 15 year fixed rate loans are about 3.20% for loans up to $417,000, higher loan amounts have rates that are around 3.375%. 5-Year-ARM and 3–Year ARM rates are both around 3.00%.
September sales data will be released later in the month. It will be interesting to see how prices and sales numbers are holding up. Stay tuned!
Have a great weekend!


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Economic Update for the week ending September 26, 2015


Stocks rally on Friday to end the week just slightly down – The stock markets have been volatile for the last six weeks mostly due to worries about the effects from slowing growth in China, European weakness, and and uncertainty about the outlook for interest rates. Early in the week markets dropped as more data came in showing China’s economy has continued to slow. One report Wednesday showed that their manufacturing had slowed to the lowest level in 6 years, during the peak of the financial crisis. However; stocks made up much of their loses on Friday after the Commerce Department reported that 2nd quarter GDP had been revised upward, consumer spending was revised upward, and Fed Chairperson Janet Yellen gave a more optimistic view of the economy. Her assessment included that The Fed does still intent to raise rates this year.  Uncertainty over rates, and The Fed’s decision last week to leave rates at near zero levels, made experts fear that The Fed felt the economy was weaker than experts believe. Janet Yellen’s speech at the University of Massachusetts yesterday seemed to put investors’ minds at ease when she reiterated that growth was strong and that a rate increase was coming. US airlines also reported that profits were up 53% in the second quarter mostly due to lower fuel prices and steady travel demand. It is the best year for the airlines since 2007. The Dow Jones Industrial Average closed the week at 16,314.67, almost unchanged from last week’s close of 16,384.79.  The S&P 500 closed the week at  1,931.34, down slightly from last Friday’s close of 1,958.03. The NASDAQ closed the week at 4,686.50, down from last week’s close of 4,827.23. 

Mortgage rates just under 4%  –  The 30 year fixed rates ended the week around 3.875% for loans up to $417,000, and around 4.00for loans over $417,000.  The 15 year fixed rate loans are about 3.25% for loans up to $417,000, and around 3.375% for loans over $417,000. The 5 Year-ARM rate is around 3.00%  and 1 Year-ARM mortgages are about 2.50%.  

Primary Mortgage Market Survey®

Freddie Mac surveys lenders each week on the rates, fees and points for the most popular mortgage products.

September 24, 2015 30-Yr FRM 15-Yr FRM 5/1-Yr ARM
Average Rate 3.86 % 3.08 % 2.91 %
Fees/Points 0.7 0.6 0.5

Next Rate Update on October 1, 2015

Weekly Survey Archive

Freddie Mac Multi-Indicator Market Index®

MiMi measures the stability of local housing activity by combining current local market data with Freddie Mac data for all states, the top 100 metros, and the nation.

Treasury Bond yields slightly lower this week – The 10 year Treasury bond yield closed week at 2.17%, up slightly from 2.13% last Friday.  The 30 year treasury bond yield closed Friday at 2.96%, almost unchanged from last week’s close of 2.93%. Mortgage rates follow bond yields so these are closely watched.

Consumer confidence reading the edges up in September- The University of Michigan final reading on consumer sentiment for September moved higher.It ended the month at a reading of 87.2 from an initial reading of 85.7 at the beginning of the month. The average reading since its inception has been 85.3. The average reading during the 5 recessions since its inception has been 69.3. During non-recessionary years the average reading has been 87.5, which is right about where we are. Consumer sentiment is important because consumer confidence is so closely tied to consumer spending which accounts for nearly a third of the economy.

Second quarter GDP revised upward – The Commerce Department said Fridaythat the second quarter gross domestic product showed a growth rate of 3.9%. This was higher than their initial estimate of 3.7%. The Commerce Department also said Friday that consumer spending rose 3.6% during the quarter up from an initial estimate of 3.1%.

Pending home sales decline in August, but numbers are still above last year’s levels – The California Association of Realtors reported that pending home sales fall 8.7% in August from July. While monthly pending home sales were down, year over year pending home sales in August were still up 12.8% from August 2014.  It was the 10th straight month of year over year increases in the number of pending sales, and the 7th straight month of double-digit year-to-year gains.


Economic update

Economic update for the week ending September 5, 2015

Economy adds 173,000 net new jobs in August- The Labor Department Reported that the economy added 173,000 new non-farm jobs in August. This was below the 220,000 jobs expected. The unemployment fell to 5.1%, its lowest level in 7 years. That is down from 5.3% last month and has dropped nearly in half since peaking during the recession. The most positive part of the report was that wages, that have been stagnant, rose 8 cents an hour in August following a 6 cent an hour rise in average wages in July. This was welcome news after June’s number showed that the April, May, June quarter had the lowest wage growth in over 30 years. August’s figure shows wage growth of 2.2% over the last 12 months, which is well over the inflation rate.

Stocks down again this week – Fears of China’s slowdown and a possible interest rate hike by the Fed spooked the markets. More bad economic data from China showed their economy slipping further. At the same time U.S. G.D.P. rose 3.7%, which was better than expected. The August jobs number showed fewer new jobs than expected, yet the unemployment rate fell to near pre-recession levels, and wages, which have been stagnant, rose more than expected. Auto sales were strong, another sign that U.S. consumers are spending money. The Federal Reserve Beige Book, the Fed’s assessment of the strength of the economy, showed that they felt that the economy was growing at a “modest to moderate pace” and that the Chinese slowdown is havering a “only a moderate affect on the U.S. economy.” This again got investors fearing an interest rate hike by the Fed. Some fear that the first rate hike since 2006 could happen as soon as it’s September 16th – 17th meeting. This was also a drag on stocks. The Dow Jones Industrial Average closed the week at 16,102.38, down from last week’s close of 16,643.01. The S&P 500 closed the week at 1,921.22, down from last Friday’s close of 1,988.87. The NASDAQ closed the week at 4,683.92, down from last week’s close of 4,828.33.
Mortgage rates remain near lows for the year – The 30 year fixed rates ended the week around 3.875% for loans up to $417,000, and around 4.00% for loans over $417,000. The 15 year fixed rate loans are about 3.25% for loans up to $417,000, higher loan amounts have rates that are around 3.375%. The 5 Year-ARM rate is around 2.75% and 1 Year-ARM mortgages are about 2.50%.

Treasury Bond yields rose from lows early in the week and closed higher than last week – Investors bought stocks and pulled money from the safety of U.S Treasury Bonds pushing yields up from Monday’s lowest point in over a year. The 10 year Treasury bond yield closed week at 2.13%, almost unchanged from 2.19% last Friday. The 5 year was under 2% at one point on Monday. The 30 year treasury bond yield closed Friday at 2.89%, down slightly from last week’s close of 2.92%.

U.S. Bank’s earnings rise – The FDIC reported that profits from U.S. Banks rose 7.3% in the second quarter of 2015. The number of “problem banks” continued to fall. Only 5.6% of all banks were not profitable. This was by far the most healthy banks have been since the financial crisis which began in 2007.

Factory orders higher – Orders from U.S. Factories posted a modest gain in July according to The Commerce Department. Factory orders were up 0.4% in July. This was not as good as June’s 2.2% increase, but it did build on that increase.

Have a great holiday weekend!


Coasting to Real Estate Success

Terre Steinbeck Beverly Hills real estate

If you’re buying or selling real estate in Los Angeles, San Francisco, or The Big Apple, count yourselves lucky. Extremely lucky. The market is bouncing back nicely in those bustling coastal vicinities. Unfortunately, the same upbeat headlines are not making the news in most of the remaining portions of the U.S. In fact, the vast majority of the country can, at best, expectmixed results in 2013. Looming on the horizon of this widespread area are: a rising number of foreclosures, microscopic advances in home prices, further regulation, and basement-level interest rates.

Of course, the gray clouds hanging over the real estate market are dissipating nationwide. But at a snail’s pace.  The reason for the sluggish advance?  Numero uno is fear. Understandably, many people are afraid that ongoing governmental disagreements will trigger another phase of economic slippage. That, in turn, would knock the crawling real estate market well back…

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Loan update

How Much Down Payment do you Really Need to Buy a House?

Santa Ana College, Community Services Program

Saving for a down payment is an important step in becoming financially prepared for homeownership, and there are options and opportunities for financing a home purchase that will allow the borrower to come with little or No Down Payment. For most first-time home buyers, coming up with funds for a down payment is the biggest obstacle to homeownership.

Mortgage Attitude

In the mortgage industry, 20% down is considered the benchmark down payment for looking strong on paper as a home buyer. How strong you are on paper will determine how you could obtain a loan.

However, this being a general standard for financial strength does not mean a requirement to get a loan. Reality is that there are home loans that can be obtain with $0 Down Payment if you are eligible.

1. FHA loans will allow you to apply for as low as a 3.5% down payment up to the maximum conforming loan limit in the county in which the property is located. Most lenders can lend up to $417,000 under FHA guidelines.

2. Conventional 5% Down Payment is another option for first time homebuyers. This is an excellent alternative to the higher-priced FHA loan Mortgage Insurance that allows to get rid of PMI after accumulating 20% equity after a minimum of 24 months.

3. $0. – Down Payment: there are 2 options that are available if you are eligible:

1. VA loans allow 100% financing all the way through the maximum conforming loan limit in the county in which the property is located. Veteran’s Affairs mortgage loans are available to veterans, current members of the military and their spouses.

2. USDA Loans allow 100% financing through the Rural Development United States Department of Agriculture. Property must be located within an area designated to be eligible for 100% financing.

There are also 10% down payment and 15% down payment loans. All 3 of these types of loans involve PMI. As time goes on, the push will be for a minimum 20% down payment. Remember with 20% down, there is no PMI. Conventional wisdom says you should put down as much as you feel comfortable putting down to buy a home. Generally, more is better than less. But don’t wipe out your savings account to do it. You will still need to have funds set aside for a rainy day and for things to buy after buying a home.

Jumbos loans are loans that usually can go as high as $750,000 with as little as 10% down.

However keep in mind that if you’re putting less than 20% down payment on a home, your monthly property taxes and fire insurance terms are most likely to be built into your monthly mortgage payment, and you’ll maybe have to pay for private mortgage insurance, as well.

Ultimately, the minimum down payment required will depend on the type of loan that you choose. Each mortgage loan type carries its own guidelines, and today underwriters closely scrutinize a borrower’s ability to repay the loan before giving you a loan.


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Economic Update for week ending July 25, 2014

Economic Update for the week ending July 25, 2014 

Home mortgage interest rates were unchanged this week at the lowest levels in over one year. Freddie Mac reported that the national average for a 30 year fixed rate was 4.13%, the same as last week. One year ago the rate was 3.31% and on January 1, 2014 it was 4.52%.   The 15 year rate was 3.26%, about the same as last week’s 3.23%. It is down from 3.39% one year ago and 3.55% on January 1.  The 5 year ARM was at 2.99%, down from 3.16% one year ago and 3.05 on January 1.  The one year ARM was 2.39%, also down from 2.65% one year ago and 2.59% January 1.  Jumbo rates are very similar with the 30 year rate around 4.25% 

The Commerce Department reported that new home sales in the U.S. dropped 8.1%, to a seasonally adjusted annual rate of 406,000 units, in June after 2 month of solid gains. Western states saw the lowest decline of just 2%. Economists did expect to see a decline after a large jump in May, but not 8.1%. Low inventory levels were to blame. Another aspect of the report focused on new housing far from cities as land for development is often “poorly located” and buyers often choose an existing home in a better location, according to the report. 

Weekly jobless claims plunged last week to 284,000, an 8 year low. According to the Labor department this is a fresh sign that the recent labor market is recovering. This big drop beat expectations. It marked the fewest claims since February 2006. 

The National Association of Realtors reported that sales of previous owned homes hit their highest level since October.  There were 5.05 million homes sold in the U.S. in June, on a seasonally adjusted, annual basis.  It was the most since October, but 2.3% lower than last June. One difference was the number of foreclosed homes sold. If you take out the foreclosed home sales, sales were up.

Inventory levels are at their highest levels in over a year. The supply of homes has climbed 10% in the last year. There is currently a 5.5 month supply of homes on the market, just shy of a 6 month healthy target, according to NAR. 

The Labor Department  reported that the consumer price index rose just 0.3% in June,  less than the seasonally adjusted increase of 0.4% in May. In the 12 months ending in June, prices were up 2.1% for the one year period. Gas prices jumped 3.3% in June as global tensions drove up prices.  That increase accounted for 2/3 of the overall  increase last month. 

Zillow Inc. appears to be purchasing Trulia. These are the nation’s two largest real estate websites. 

The Dow  dropped 123.23 points on Friday to close the week at 16,960.57. It was down -0.816% from last weeks close of 17,100.18. The Nasdaq closed at 4449.56, up 0.39% from last weeks close of 4432.15.  The S&P 500 closed at 1978.34, up 0.006% from last weeks close. The markets surged earlier in the week with the DOW closing at 17,113.54 Tuesday on higher than expected second quarter corporate profits. Investors got bad news on Friday about the American shopper when and Visa Inc. said that the second half of the year was not looking as robust as originally expected. Visa stock dropped 3.6% on Friday

Applications for U.S. home mortgages rose last week as both purchase and refinancing applications picked up, an industry group said on Wednesday. The Mortgage Bankers Association said its seasonally adjusted index of mortgage application activity, which includes both refinancing and home purchase demand, rose 2.4 percent in the week ended July 18. The MBA’s seasonally adjusted index of refinancing applications climbed 4.1 percent, while the gauge of loan requests for home purchases, a leading indicator of home sales, rose 0.3 percent.

As inventory has begun to increase we are seeing more choices for buyers.  This is a relief when showing property, and a relief for buyers. We are seeing more price reductions, which is difficult for sellers. The market is definitely changing to a more normal market. Many of you are complaining that prices are falling.  I don’t believe that prices are actually falling.  I think that some sellers just got lucky in  the last few months and sold homes for more that they should have as buyers got caught up in the heat of the market. Home prices are still far higher than one year ago, yet less than the very highest sales two or three months ago. We are even seeing appraisals come in higher than the current sales prices. New homes and totally remodeled homes are still in short supply and we are still seeing those homes selling for record prices. If your home or your listing is not selling it is definitely time to reduce the price. I do believe that prices will rise again next spring, but at a much more moderate pace.

Have a great weekend!